Wholesalers - Real vs Rip-Off

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Starting Your Internet Business Right

avoiding wholesale scams

The Internet is loaded with so-called "suppliers". Everyone who has a couple of wooden birdhouses or glass figurines to sell wants you to think they are a real, live wholesale supplier. They use phrases like "Your Wholesale Source", "Direct To You", and "This is YOUR road to Internet Riches!"

They use words like "Ultimate", "Central", "Connection", and "Millennium". They give themselves clever names that sound similar to popular. They are nothing like the companies they try to sound like. They make outrageous claims that they have tens of millions of products you can sell. That's not true.

If you let them huff and puff at you, they'll blow your house down.

I often am not sure whether I should be amused or horrified at some of the tricks that these people are using to take your money.

When you open an online Store, you obviously need products to sell. We've been talking about Product Sourcing in the last couple of Chapters.

The most critical thing to remember about Product Sourcing is that you NEED to be as close to the manufacturer of your products as possible. The more "middlemen" you have to go through, the more fingers are dipping into your profit potential. The Internet is FULL of middlemen, and they've all got their sights set on YOU!

Here are some of the things you should watch out for, in both Drop Shipping and Bulk Wholesaling:


In order to earn the most possible profits on the products you sell online, you must work directly with genuine wholesalers. Anyone who gets in between you and a real, factory-authorized Wholesaler for ANY reason is simply turning your order around to someone else, and taking a profit from it. That profit should be yours, not theirs!


There has always ben a trend of scammers always looking for ways to rip off your personal information and selling it to others. There are now several so-called "wholesale directory" sites online that look and sound very convincing, and sell you access to their sites at very low monthly costs or for free. We at Worldwide Brands know that it's impossible to maintain quality directories of that kind of information and sell it so cheaply or give it away. We've been doing this since 1999, and there are certain costs that you just can't get away from if you want to provide real, constantly updated Wholesale Supplier information. So, we looked into what these cheap directories were REALLY doing, and we found out. We were truly disgusted when we got our answers.

These online directories are nothing more than fronts for a much larger marketing machine that's dedicated to separating YOU from your MONEY. The actual wholesale information is largely outdated junk and links to fake wholesalers. All they are really interested in is gathering your personal information, so they can sell it to anyone who will pay a couple of bucks for it. That's one way they make money.


Broker Networks that you'll see advertising as Drop Shippers and Bulk Wholesalers are not illegal, and are not scams, but in our educated opinion they are not what they want you to think they are.

Broker Networks can best be described as something similar to the Multi-level Marketing business model. In order to use this "Network", and take advantage of the "millions of products" they claim you can have drop shipped, you must first BUY thousands of dollars worth of products yourself (many times from large retail stores). Then you BECOME a "Broker" yourself, trying to sell those products to other "Brokers" within the "Network". You and those other "Brokers" in the "Network" (people just like you) actually become the "wholesale suppliers" these sites want you to think you're signing up with.

Many times operations like these will not even complete your "application" unless you can prove that you have several thousand dollars to use in order to start buying products, so you can become a "Broker". Be VERY careful with your credit card information, and ask a LOT of questions!

Not what you expected from the advertising on their front page is it? If you're okay with that kind of business model, fine. Again, it's not illegal, or a scam. Just remember that this is NOT direct wholesale supply in any traditional fashion whatsoever.

There are some Broker Networks that claim to be wholesale suppliers of tens of millions of products. To the best of our knowledge, there is no single wholesale supplier anywhere on the planet that is anywhere near that large.

There are some Broker Networks that claim to be wholesalers of a huge variety of Brand Name products. They are simply passing your orders on to the real sellers (other "Brokers" just like you, and even retailers, in some cases!) of those Brand Names, and taking part of your profits.

These companies also sell your Personal Information to dozens of other online marketers, and make money that way.

If you want the best possible profit margins, the transactions you make when you buy products to sell online should be between you and a Factory Authorized Wholesale Supplier ONLY.


As we warn throughout our site, there is one constant thing about Drop Shipping that you need to watch out for. Over and over again, you are going to see companies who do their best to make you think they are real wholesale drop shippers, when they are NOT.

Drop Shipping 'Agents' are a particularly interesting issue. You see, they DO provide access to one, two, or maybe a few REAL drop shippers. However, they are STILL a MIDDLEMAN. There are two problems with using Drop Shipping 'Agents'.

1.     They ARE middlemen. They charge you recurring monthly and/or annual fees that you should not have to pay in order to access the real drop shippers they provide access to. You should never pay a recurring fee for the 'privilege' of placing orders with a real drop shipper!

2.     You'll find the competition impossible to deal with. Most of these 'Agents' only give you access to one drop shipper. Even those 'Agents' who give you access to several drop shippers (and charge you more for it!) are doing something that can bury your business before it gets started. They are causing intense competition! They are going to advertise their service all over the Internet. Thousands or even tens of thousands of people will pay for it. Guess what happens then? YOU and all of those thousands of others are all trying to use the SAME small handful of Drop Shippers! The competition becomes way too intense, and you'll never sell anything!


Let's take a step back and go over the whole issue.

A real Wholesale Drop Shipper or Bulk Wholesaler ALWAYS owns their OWN warehouse. They have offices in, or attached to that warehouse. It's a physical building, with walls, windows, doors, maybe a few trees outside on the lawn. There is a loading dock, where trucks back up and deliver pallet loads of products. They have people working for them in that warehouse. The people who run their web site peek their heads out of the office doors and say, "Hi, Wanda!" and, "Hey there, Mike!" to actual human beings who work there, receiving inventory from manufacturing plants, packaging orders for Drop Shipping or Bulk Wholesale, putting a new filter in the Coffeemaker, etc.

Drop Shipping "Agents" work very hard to make you think they own their own warehouses. There are some who are very good at that. They tell you that you can access thousands, or even tens of thousands of products from their 'warehouse', or from many of their different 'warehouses' in different locations.

Again, here's the first important part. Drop Shipping "Agents" do NOT own their own warehouses. They are MIDDLEMEN.

No matter how many products or warehouses these people claim to have, they don't have a single one. They're just sitting in a house or a rented office somewhere, thinking up clever web site text and new ways to make you think they are the real thing.

Some of them are even cleverer. There are 'Agents' out there who will actually TELL you that they ARE 'Agents'. They'll tell you that even though they ARE 'Agents', they don't really make any money by acting as a middleman. Some of them want you to believe the do it out of the goodness of their hearts. Others will tell you that they make their money only from your 'Membership Fees'. However they say it, they usually bury this information in their sites, hoping you won't pay attention to it, and they sugar-coat it in such a way that it sounds really good to you if you DO realize what they are up to.

Here's how they operate:

-         They go online and find one, two, five, ten, or sometimes more real wholesale drop shippers.

-         They contact these real drop shippers, and say, "Hey, send us a list of your products and a bunch of pictures, and we'll help you sell them online through OUR order system". Most real wholesalers know better than to deal with something like that. However, there will always be some who will go along.

-         They create a web site that makes it look for all the world that they are the Universe's Answer to Drop Ship Warehousing and Wholesaling.

-         The small ones simply have one group of products you can order. When you place an order, they will turn around and send that order to the real drop shipper, who will send it to your customer.

-         The bigger ones will tell you that they have a whole bunch of "warehouses" all over the place, with clever names. North Warehouse. South Warehouse. East and West Warehouses. Pink Warehouse. Blue Warehouse. Plaid Warehouse. You get the idea, right? They'll tell you that you can order from any one of those "warehouses", for a price. Some of them give you one or two "warehouses" for your initial 'Membership Fee', and then jack up the 'Membership' cost if you want to order from more of their "warehouses". Again, these people don't have any warehouses! Their "warehouses" only exist in cyberspace! They're nothing more than a collection of product images that these middlemen got from a wholesaler. Each one of those "warehouses" is only a collection of product images from a real drop shipper that you should be working with DIRECTLY, instead of paying some 'Agent' a FEE for the privilege. When you place your orders, those orders will simply be turned around by the 'Agent' to the real drop shipper for fulfillment.

-         Some of these "Agents' will tell you that it's better to work with them, even though they ARE 'Agents' because they are "centralizing" your ordering and shipping. Believe me, we've been in this business a long time, and we've never seen an ordering or shipping issue that was enough of a problem to justify ordering through middlemen. Not ever.

Is this illegal? No. Is it a Scam? No, not usually. It's just a very poor business idea, in our experienced opinion.

Think about it the second part of the problem again. These people are offering you an indirect (middleman) route to a small handful of drop shippers. They'll promote that same small handful of drop shippers to tens of thousands of people like yourself. Do you really think you'll be able to compete with thousands, or tens of thousands of others, who are all trying to sell the same products from the same small handful of drop shippers? Not a very pleasant thought, is it!

Would you say it's a good business decision to take a middleman route to a very small small number of drop shippers being used by a huge crowd of others?

The answer is obvious, of course.


Have you ever come across an "Online Business Opportunity" like this?:

-         They'll create a storefront for you!

-         They'll provide you with THOUSANDS of products that they'll drop ship for your store, and allow you to sell only their products!

-         They'll provide you with Merchant Services so you can accept credit cards without having to open a business bank account!

-         All for only $399 to get it setup for you and then it's just $29.95 a month!


Wow, does that just seem too good to be true?? That's because it IS too good to be true. Oh, sure, they'll do what they say. It's a legal business. But tell me this...just how much money do you think you'll make?

Think about it for a minute. THEY establish accounts with wholesalers. THEY mark those wholesale prices WAY up. They force you to buy products only from them. Then they get YOU to put in all the time and effort to SELL those products to people, at a VERY slim profit margin for YOU.

Congratulations! You've just become a commissioned salesman for someone else's business!

Um, not quite what you had in mind was it?


Run across one of these yet? A company who claims to be a "drop ship distributor" or a Bulk Wholesaler, but has a "setup" or "membership" fee?

Let me say this very clearly:

A REAL WHOLESALER DOES NOT CHARGE YOU A FEE just to set up a wholesale account!

ANY company that wants you to BUY YOUR STORE'S PRODUCTS FROM THEM, and wants you to pay an "account setup fee", should be AVOIDED at ALL COST! Almost without exception, these companies are middlemen. You will never make any real money with them. They take your "account setup" fee, and that's all they really wanted in the first place. Good luck trying to get a refund!


There are actually people out there who GUARANTEE that you will be one of the "few" who succeed in your Online Business if you use their drop shipper or wholesaler information.

That is ridiculous. NO ONE can guarantee anyone's success at anything. People who tell you this are some of the worst people to get tangled up with online, since if they're willing to so boldly state such an obvious lie, they're willing to do anything to cheat you.

Any time you see ANYONE who Guarantees your Success, you've found a bold-face liar who is simply out to take your money.

Run the other way immediately!


These places spend a great deal of effort trying to convince you that they're real suppliers. We spend a lot of time sorting these profiteers OUT of OUR lists of Directory candidates. Here's how they operate:

-         They put up a site that contains all kinds of unrelated product lines, and tell you they'll Drop Ship for your business.

-         They may charge a small "account setup fee".

-         You sign up with them, thinking that they are an actual wholesale supplier, and you place their products for sale on your site.

-         Your customer orders a product from you, and you send the order to this fake "drop shipper" (middleman).

-         The middleman, in turn, places the order with the REAL drop ship supplier, and has it sent to your customer.

-         You end up paying a lot more than you should for the product, because the fake "drop shipper" is marking up the price to YOU.

-         You lose profits that should be yours.


Sounds pretty good, doesn't it? FREE sites giving you the names of all the drop shippers and bulk wholesalers you'll ever need! Ok, let's back up and think about that for a minute. Free? Hmm. Remember the Number One Rule? If it sounds too good to be true, it IS too good to be true.

Yes, we've checked these people out, too. Again, just take all the junk information I talked about above, and slap it on a free web site.

Why do they do it? Simple. They hope they'll get enough people coming to their sites so that they can charge OTHER companies for advertising space. While you're out there chasing your tail and wasting your time with useless information, they're making money by selling ads to someone else. How nice for them! Doesn't do anything for YOU, though. In fact, it hurts you. Wasted time equals lost profits.

In Conclusion

Many of these people are very clever. Their sites look legitimate and they present themselves well. All they really are is just another middleman that is sponging off of your hard work. All they will do is waste your time.

At Worldwide Brands, Inc., we will not waste your time! We publish only genuine, verified Drop Ship Suppliers and Light Bulk Wholesalers in the Wholesale Directory!